Context Globalisation has been the most significant international trend of recent decades. While the increasing global interdependence has raised the level of prosperity in many countries, it has also given rise to and accentuated inequalities, and created new forms of vulnerability. Switzerland has gained from globalisation and currently stands as one of the world’s 20 largest economies. Its economy is heavily export-oriented and closely integrated in global value chains. In terms of competitiveness and innovative capacity, Switzerland is a world leader thanks to its highly-skilled workforce and strong research base. Globalisation will remain relevant in the coming years, although there are also counter-trends. In many places there is a discernible return of nationalist sentiment. Questions around identity and differentiation are becoming more important. Moreover, several interacting drivers of change are altering the framework conditions for Switzerland’s foreign policy. The international context remains volatile and difficult to predict. In terms of political drivers, global power shifts involve fragmentation. Nationalism and confrontational power politics are on the rise. Tensions between major powers are again strongly impacting world politics and the global economy. The strategic rivalry between the United States and China, which manifests itself in trade, technology and security issues, also clearly highlights diverging values, with China advocating a state and development model that does not link prosperity to political pluralism. Meanwhile, although the democratic and market economy model remains successful, it is coming under pressure. In addition, many democracies face a crisis of confidence.1 The world economic order is also becoming more fragmented. While there has been a marked increase in bilateral and plurilateral trade agreements, little progress has been made in negotiations at multilateral level, in particular in the World Trade Organization (WTO). Protectionist measures and the use of economic means as policy instruments are weakening trade. The risk of a deterioration in the global economy is rising, while the scope for monetary policy as a way of supporting the economy is diminishing. One important economic driver is the rapid increase in physical and digital interconnectedness. Growing connectivity through infrastructure and technology offers major opportunities. However, this increased interconnectedness is also being used as a means of political control. Globalisation is also shifting, with cross-border trade in services growing faster for some time than global trade in goods, and intra-regional trade tending to increase more strongly than inter-regional trade.2 Far-reaching transformations in industrial production 1 The Global State of Democracy 2019, International Institute for Democracy and Electoral Assistance, 2019. 2 World Bank: https://databank.worldbank.org/home.aspx. as a result of digitalisation and automation suggest that this trend could become more marked. The relocation of factories away from low-wage countries and closer to target markets is now possible due to cheaper production methods. The environmental drivers of change, particularly climate change, are increasingly shaping foreign policy. The consequences of environmental change are undermining developmental progress. If mobility and economic growth come at the expense of the environment, this ultimately also poses a threat to prosperity and security. Environmental protection and the sustainable use of resources are becoming ever more important. Economic growth must be further decoupled from harmful emissions. A global energy transition from fossil fuels to renewables could lead to more decentralised energy supply systems. This will have far-reaching geopolitical implications which cannot yet be estimated in detail.3 Technological developments will be one of the strongest drivers of change in the coming years. Data and information play a key role in the race between the world’s major powers: they have become a key ‘commodity’ and are altering the foundations of power. The risk of the digital realm being misused for criminal purposes is clear, and the need for regulation is therefore significant. Artificial intelligence (AI) heralds a new phase in the digital transformation. AI, machine learning and robotics offer tremendous opportunities to promote prosperity and sustainable development. There are also major challenges, however, as AI raises some complex ethical and legal questions in various fields of application.4 Finally, social change is also influencing foreign policy. A desire to regain a perceived loss of sovereignty and identity, and declining trust in politics and its institutions since the financial crisis of 2008 have led to a rise in protest movements. Non-state actors are demanding authority and setting limits on states’ influence in policy-making. New transnational movements such as climate change activism are influencing policy. While social media create opportunities for networking, they also favour centrifugal forces that drive society apart. The world order that has endured since the end of the Cold War is undergoing radical change. It is now in danger of being eclipsed by a more unstable architecture of competing regional norms and regulatory systems. The rule of law, human rights and international law are increasingly being called into question or interpreted differently. It remains to be seen whether this is a temporary setback or a completely new trend. 3 A New World: The Geopolitics of the Energy Transformation. Global Commission on the Geopolitics of Energy Transformation, 2019. 4 See report of the Interdepartmental Working Group on Artificial Intelligence addressed to the Federal Council, dated 13.12.2019. Foundations 7